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Lenders tweak rates

Weekly home loan report

Tuesday 9th August 2005

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It is a relatively benign environment on the interest rate front at the moment meaning that very few changes in home loan rates are coming through and no major competitive plays in progress.

Bank of New Zealand continues with its discounted two and three year loans, however it isn't making much noise about them at present.

At the longer end Kiwibank still has its 6.99% five-year rate, however last week it added some conditions to it. Loans have to be new ones, for more than $100,000 and 20% of the loan must be taken out on a variable rate.

The only movement to bank rates in the past week were National Bank putting its one-year rate up to 7.70% and TSB Bank confirming its one-year rate was 7.80%.

Other lenders to move in the short-term end of the market were NZ Mortgage Funds (which put up all its fixed rates), while PSIS and SBS put their one-year and six-month rates respectively up to 7.90%.

Besides NZ Mortgage Funds, two other lenders moved longer term rates last week; AXA dropped its four and five year rates to 7.50% each, Pacific Home Loans also dropped its three, four and five year rates, but lifted its two-year rate to 7.68%.

Today SMC Building Society upped its six and 12-month rates and dropped its three-year one.

A more significant change was made by Pioneer. It dropped its three, four and five year rates.

While the market has been relatively quiet at present, there still seems to be plenty happening in the housing market.

Quotable Value reported yesterday that the growth in property values is continuing to edge upwards. While ASB Bank said house expectations have dropped slightly but market expectations are for a soft landing for the housing market.

Although we are in the middle of winter the home loan market is due to heat up soon when banks launch their spring campaigns. Good Returns understands some campaigns will kick off in around three week's time at the start of September.

Current rates
Three year rates range from a low of 7.45% (offered by BNZ. PSIS and Bank Direct) up to Silver Fern which tops the table at 8.14%. Westpac's capped rate for this term is higher on 8.40%.

Five year rates range from Kiwibank's 6.99% - which as mentioned earlier has some conditions - up to Silver Fern at 8.09%. The next lowest rate after Kiwibank is 7.40%, and six lenders are offering this rate.

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